Ford of Europe says it will build a hybrid-electric vehicle and plug-in version of its C-Max cross/utility vehicle at its Valencia, Spain, plant for launch in 2013.

The auto maker is expected to invest up to $410 million to accommodate production of the new hybrids, along with the conventional C-Max and 7-passenger Grand C-Max. Of the total, the hybrid programs are expected to account for $36 million.

Ford plans to export the conventional version of the Grand C-Max to North America.

The Spanish government and Valencia regional administration are providing grants in line with European Commission rules.

The exact amount of the public funding will be determined at a later date, Ford says, noting the program supports the region’s goal of becoming the center for European advanced research and environmental engineering.

The C-Max HEV and PHEV will join Ford’s other battery-electric and hybrid vehicles planned for Europe by 2013. These include the Ford Transit Connect BEV in 2011, Ford Focus BEV in 2012 and an as yet-to-be announced HEV model.

Much of Ford’s EV powertrain development is being done in North America with supplier partners such as Magna International Inc. and Azure Dynamics Inc.

Nancy Gioia, Ford’s director-global electrification, told Ward’sin March that while electrified vehicles account for only about 2.4% of total U.S. light-vehicle sales, Europe’s percentage is even less due to high penetration of more fuel-efficient diesel engines.

Therefore, Ford expects most of its upcoming EVs to be targeted toward fleet use, especially given their higher cost of the advanced technology and limited range.

“The No.1 competitor to electrification is diesel and gas engines,” Gioia said at the time. “We need to have large improvements in (electric) vehicle technology to justify the extra cost.”

Europe is traditionally a diesel market, agrees Ford of Europe spokesman Paul Volkereis. “But there are countries where diesel is not as important (at the retail level),” he tells Ward’s. “In Germany, (diesel) is important. But in some regions in Europe, you have diversity. And fuel prices for diesel are high, so hybrids could be an attractive solution.”

bpope@wardsauto.com